Identification
A bullish Engulfing pattern is followed by a white day whose close is higher
than the second day.

The Psychology
In a downtrend or during a pullback within an uptrend, a bullish Engulfing
pattern forms. By itself the pattern has moderate reliability as a reversal
indicator, but when the it is followed by another white day (preferably
on strong volume), the overall pattern becomes much more reliable.

Since bullish Engulfing patterns have decent reliability when played at support, Three Outside Up formations have high reliability when they form in the same situation. Here, FMXI rallied and then gave back about 50% of its gains. The stock then formed a bullish Engulfing pattern and followed it up with a another up day to complete the Three Outside Up pattern, and the stock proceeded to bounce over 30% in just one week.

Here is another example of the high reliability bullish Three Outside Up pattern forming at a level that was previously established as support. Note the volume surges.

TEVA was bouncing around in pretty volatile fashion when it formed a bullish Three Outside Up pattern which ended the consolidation period and began the next leg up for the stock.